It’s getting closer to month end and you’re needing to know who you owe, who owes you and how much VAT and PAYE you need to pay over to SARS. You’ve spent the whole month focusing on sales and delivering services, all the while the pile of slips and paperwork, dating back three months, keeps growing. You wish there was a magic wand you could wave that could automatically do all your bookkeeping and give you the answers you need. While there is no magic wand, the truth is that the majority of bookkeeping is just good filing and referencing of the paperwork you have collected during the month; you don’t need to pay an accountant to do that! A little guidance and some helpful input on setting up a simple admin system can go a long way in saving you time and give you the peace of mind about being on top of your business. Here are a few basic bookkeepingtips to help you better manage the finances of your startup business:
Start early with good habits – implement systems and procedures from the get-go.
Ensure that you put a basic filing system and simple routine procedures in place to collect and file all your financial records. Implementing this kind of basic bookkeeping will save you time and give you peace of mind when it comes to your cash flow management. A lot of small businesses tend to live in the now – a dangerous frame of mind. While it might be easy at first to do a simple daily recall of the day’s incoming and outgoing monies – that isn’t feasible over weeks and months. As your business grows, so too will your records. One employee might turn into an entire workforce, which requires admin and financial management on a much larger scale. By setting up a basic bookkeeping system that is forward thinking you can avoid falling behind.
Be organised, keep records of your finances and categorise correctly.
The value of a properly managed filing system (even a digital one) cannot be emphasised enough. Ensure that you have a method of collecting, referencing and storing documents. This ensures that everything has a place, a reference and makes it easier for you to find when you or your accountant are looking for it. A simple referencing system is very helpful. For example if you pay for something using cash from your business you could write BC on the receipt for business cash, or for something you paid for from your personal money that is for the business you could write MO on the slip, for my own money. This makes it simple at the end of the month to sort and file your slips.
Get clued up on tax especially PAYE and VAT regulations so that you remain compliant.
Chances are that if you have little or no accounting knowledge you might also be unaware of the legal implications of non-compliance. It’s your responsibility to take the time and educate yourself through research. Prevention is better than cure – trying to untangle a tax-related fiasco is far more stressful and time consuming than taking the time to ensure that your internal financial matters are approached and managed right. Many small businesses fail because they fall behind on paying over PAYE and VAT amounts due to SARS and instead use the available funds for other expenses in the business. When they finally meet with their accountant months later they find they owe large amounts to SARS and cannot pay so they land up liquidating. The key is to stay on top of your records each month so you know what is due to SARS and your suppliers and can pay it over in the month it is due.
Make use of reputable tools to assist you with basic bookkeeping.
Technology makes everything we do easier. Making use of a smart online accounting system helps to take care of basic bookkeeping duties like the creation of quotes, invoices and manages payroll. SMEasy, an online accounting and business management system also produces accurate financial reports which your accountant can use to manage your books.